Minimum Wage - Why it's Not a Livable Wage
Facts that dispel the "minimum wage" myth
Experience has it's advantages when looking at a "livable" wage demand
I'm 64 yr. old retired dude. I've experienced more than one demand for a "livable" wage. The reasons are similar throughout the years. They all revolve around this statement: "It's not right that people get paid a wage that does not allow them a decent life or a "livable" wage."
I entered the work force at 16. The "livable" wage was $1.60 per hour. According to the government, a person could have a decent life with a "livable" wage of $1.60 per hour. This had risen from the original decent life or "livable" wage of .25 per hour when the minimum wage was first set in 1938.
Then I experienced wage and price controls during Nixon's presidency. Nixon outlawed any increase in income for a decent life. He also made it illegal for the market to move the "livable" wages higher. Are you surprised that the government actually attacked the basic concept of a "livable" wage?
He outlawed price increases. But, businesses worked around those laws, and prices did go up.(The markets always work) Hence, the "livable" wage was now an "unlivable" wage.
The other thing about me as follows: I use the "KISS" principle to help me understand. (KISS principle - keep it simple, stupid) Please don't get me wrong! I'm saying I'm a simpleton - I'm stupid! I need simple explanations to understand concepts. I'm odd that way.
There are two economic systems.
1) Capitalism - an economic and political system in which a country's trade and industry are controlled by private owners for profit, rather than by the state.
2) Socialism - a political and economic theory of social organization that advocates that the means of production, distribution, and exchange should be regulated by the community as a whole.
With the two economic systems explained, we can now understand the economic system in the U.S. From looking at the definitions, we can see that the U.S. is NOT a capitalistic system but a socialistic system. And a socialistic system is a "theory". Hence, a "livable" wage is a theory that has been postulated. (an assumption that a "livable" wage is attainable) The minimum wage was set in 1938 at .25 per hour, why has this become an "unlivable" wage?
There are two reasons:
1) The FED (The Federal Reserve Board) wants inflation. (This makes the "livable" wage of today the "unlivable" wage of tomorrow)
2) Government interference in the market place
Always a special interest
The FED's sole purpose is to help the banks that own the FED
2) The FED (The Federal Reserve Bank) always wants inflation.
The FED is a corporation the U.S. government entrusted the task of monetary policies. It's a company that's owned by the 8,000 U.S. banks. Banks like inflation. (Inflation leads to an increase in prices and assets) Since assets increase in value during inflation, banks benefit. (their collateral increase in value)
Inflation's not good for consumers. Inflation is the erosion of consumers purchasing power. Inflation increases revenue to the government with no extra taxes. Inflation protects the banks from losses. Assets used as collateral go up in price. This means the loans made are more secure.
Conversely, banks dislike deflation. Deflation causes prices and the value of assets to drop in value.
Deflation is good for consumers. Prices are declining, thus increasing consumer purchasing power. Deflation lowers the revenue of the government. Asset prices go down and tax revenue from purchases goes down. Deflation causes problems at the banks. The collateral used for loans are decreasing in value. This puts the banks loans at risk for default. The assets employed to back loans go below the loan amount, putting the bank at risk for defaults.
Thus, the financial crisis of 2007/08. Home prices cratered, leaving the bank's mortgage portfolios with huge losses. Deflation continued, resulting in the economic mess that we have now. Massive FED intervention in the markets to increase inflation, without any substantial benefit to consumers.
The FED, owned by the banks, wants inflation. It protects member banks. The government wants inflation because in increases tax revenue. Both entities are working to decrease the purchasing power of the "livable" wage.
Don't forget the definition of socialism - an economic theory. Theory is an assumption or an ideology. The exact opposite of "truth". The U.S. is a socialistic economy. Hence, the FED is theorizing that their procedures will work. There is not any "truth" in their actions.
90% of Subsidies Go to Top 10% Farmers - the Small Farms Get Very, Very Little
Government actions do not defend a "livable" wage
3) Government will not defend a "livable" wage. Government, as an entity, is for power, control and money.
Think about that statement for a minute. When was the last time that the government did anything to defend or increase your purchasing power? (Answer - 1971 - 1973. This was a major catastrophe!)
In 2015, there were over 3,500 new rules enacted by government agencies. Over 2,000 additional rules are pending. For every rule that's enacted, someone at a company has to keep track of those new rules. Costs rise as they comply with the new rules.
Maybe it's a rule about pollution. A person at a company has decipher if the rule applies to their business. If it does, they may have to change product design or install new equipment. These acts by the government trickle through all aspects of business in the U.S.
Conforming to government regulations is an added cost. It's paid for the business. Then that cost is added to the total cost of a product. The additional costs are eventually paid for by the consumer.
Here's a list of government policies and actions that do not defend a "livable" wage:
1) The "War" on terror.
2) The "War" on drugs
3) The Affordable Care Act (Classified as a tax by the Supreme Court)
4) Subsidizing Planned Parenthood
5) 50% of food products have price supports established by the U.S. government
6) Military installations throughout the world (At present 38 and rising)
All government actions take money out of your pocket. Thus, it affects the purchasing power of your wages. The more taken out, the less "livable" your wages.
I'll include a graph. It shows the loss of purchasing power in the U.S. dollar since the inception of the FED. This will show you the goal of the U.S. government and the FED.
I'll give you a hint - it's not to defend your "livable" wage.
Keep in mind that the U.S. economy is a socialist economy. The actions by the government are based on theory vs. truth.
Purchasing power of the U.S. dollar
The best example of the government not defending citizens "livable" wage
The best example of citizens supporting corruption.
"the Special Inspector General for TARP summary of the bailout says that the total commitment of government is $16.8 trillion dollars with the $4.6 trillion already paid out." Forbes article 7/14/2015.
Let's play around with some numbers.
The $4.6 trillion is $13,000 for every man, woman and child in the U.S.. $32,000 per average family (2.5 people is the avg. size of families in the U.S.)
At $16.8 trillion, it's $52,000 for every man, woman and child or $130,000 per average family.
(I know you're thinking, "Man, I could do some buying with that kind of money!!!" Let's not get ahead of ourselves)
965 banks, insurance companies and government entities received bailouts. (ProPblica) These companies and government entities were the "cream of the crop". They had the people with MBA's and PHD's that knew, really, really, knew, how to manage investments and money. They went bankrupt.
They got charged and fined for laundering money. In addition, charges of fraud, rigging markets, rigging interest rates and fines for SEC violations were levied agains the banks. The fines they paid totaled $1Trillion! Not one high ranking bank official went to jail. As the government doled out the taxpayers monies, the senior bank officials continued to receive millions in compensation.
Taxpayers, on the other hand, received nothing. They didn't get charged with fraud, nor fined for breaking laws. The excuse given by the government was, "It's your own fault." Consumers should have known the banks were misleading taxpayers with their elaborate mortgage schemes.
Comparative scenarios can be found throughout the history of American Government. When "Push Comes To Shove" , the government will always let the citizens of the country suffer.
If you want to keep score:
Government supporting corrupt enterprises + 965
Government supporting a "livable" income for taxpayers - 0 - zilch, nada, zippo!
Keep this in mind - American citizens suffered 9 million of foreclosures and and millions of bankruptcies. Not one executive, from any bailed out company, went to jail.
Conclusion - You can have a "livable" minimum wage of $50 per hour. The government's goal is to take as much they can. If citizens don't stop the corruption in government, no "livable" wage will last long. Settling for a "livable" wage now a settling for corruption or favoritism forever.